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Dealing with surreal and frightening times

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Dealing with surreal and frightening times

By , April 8, 2020
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In our current environment, we are all hearing words like unprecedented, crises, surreal, frightening and disturbing being used to try and articulate how we are all feeling. As humans, we also may choose to try and blame someone for the current situation or argue about whether or not it is unprecedented in comparison to war times or the outbreak of the Spanish flu early last century. The fact remains however that we are all living in a changed world from only a couple of months ago. As business owners then, what are the things we need to focus on in order to come out the other end of this with our lives and businesses intact?

When any business is navigating turbulent waters, managing cashflow must be a very high priority. Realistic forecasts need to be done on a regular basis with constant reporting of actual results against those forecasts. There have been some real and genuine government assistance programs announced. We need to ensure that where possible we take advantage of those programs.

What opportunities are there from a business perspective that we might be able to develop?

As an example, we are seeing businesses expanding their online ordering, sales and delivery services. Review each line of our expenditure or costs of doing business. Which ones remain appropriate and which ones may be able to be reduced or deferred? There is an old saying in business that “cash is king”. This is particularly the case in our current environment. Cash is like the blood that runs through the arteries of our businesses, without which our business will die.

For many businesses, its people are its most valuable resource and also one of its biggest costs. Our people involve our employees. But we also need to consider all our stakeholders including our customers, our suppliers, our financiers and even the community in which we operate. We need a genuine plan around managing and communicating with all these people, even though that plan may be an evolving one that changes as circumstances change. Communication must be a key ingredient here. At a time when the “rumour mill” can be running rampant, official lines of communication need to be stronger and more often than the unofficial flow of information.

We need a solid business plan more than ever at times like this. That may mean revisiting our current plan and updating or making changes where necessary. It may mean writing a plan because, currently, one doesn’t exist. It may also mean implementing or formulating a disaster recovery plan if none is in place. Disaster recovery plans can sometimes be viewed as a low priority when we are sailing through relatively calm predictable waters. But, as we have seen, circumstances can change quickly, and we need to be prepared. Now is a great time to formulate plans, and then as part of our ongoing annual program of good governance, these plans need to be reviewed and updated where necessary.

Along with all of the above, as business owners, we also need to ensure that we maintain our own physical and mental wellbeing. It’s difficult to function effectively and productively in all our roles as business owners, employers, and family members if we are not physically and mentally fit ourselves.

scottpatterson

Scott Patterson

Director | Succession Plus

Scott Patterson has extensive business and professional experience, including over 20 years as a principal of a highly successful public accounting and financial planning firm. His passion is working with clients to improve the value of their businesses, and create a more certain future for them, their stakeholders and their families.

Scott's aim is to deliver strategic thinking, tailored advice and integrated solutions for family businesses, SME's and agricultural enterprises.